Business

Joe Fresh sets sights on overseas market with first store in Korea

A Joe Fresh store is picture in New york in an undated handout photo. THE CANADIAN PRESS/HO

Canadian clothing brand Joe Fresh is betting that affordable fashion is a concept that knows no borders as it opens a location in Korea this weekend â€” its first store outside North America.

The clothing line, ubiquitous in Canada with grocery giant Loblaw Companies Ltd. (TSX:L), says the flagship storefront will open Saturday in Seoul and that plans are already in place for nine more locations in the South Korean capital by the end of the year.

Creative director Joe Mimran says one of the biggest challenges for the company will be familiarizing international consumers with the Joe Fresh brand in a fiercely competitive fashion market.

"It's a completely new brand and that's certainly one of the challenges," Mimran said in an interview Thursday from Seoul, where he has spent the week promoting the launch.

The rollout in Korea is part of a four-year plan to open up to 141 Joe Fresh stores in 23 countries, including in the Middle East, North Africa, eastern Europe and South America.

In Canada, the Joe Fresh brand is sold by Loblaw at more than 340 locations inside its Canadian supermarkets, and in 16 stand-alone and studio stores. In 2012, it expanded into the U.S. and now has six locations in New York and New Jersey, with the line also available in J.C. Penney stores in the U.S.

Marketing expert Brynn Winegard called Joe Fresh's foray overseas an "intelligent" strategy for a retailer that knows it can compete in the oversaturated U.S. and Canadian markets.

"If you can conquer the economic kingdom that is the United States, then you're capable in terms of scale and competitive to go anywhere else," she said.

"It's a great time to try other markets â€” markets that would be friendly to Canadian brands and to see how it would fly when we are having an increasing competitive and fragmented market here."

With the arrival of U.S. retail giants like Target, Nordstrom and Marshalls in Canada, Canadian retailers may need to look further afield to grow their brands.

Winegard said overseas expansion is the perfect way to do that because the markets are smaller than in the U.S. and international customers already have a positive outlook on Canadian brands.

"If you don't want American retailers to come and eat your lunch, you have to get good at being in scale-friendly, competitive saturated markets," she said.

Mimran said the success of the discount clothing line overseas will depend on how it can differentiate itself from other "fast fashion" and basic fashion lines like H&M and Japanese retail giant Uniqlo.

"Every retail brand and every fashion brand has its own personality, own point of view. It's not just price," he said.

"You have to create a voice. There are hundreds of apparel brands out there and it's a matter of creating a voice and an identity."

That identity is one Mimran calls a "happy brand" that focuses on bright colours and clothing and apparel that is on-trend, but not necessarily trendy.

Consumers in Korea can expect the same selection in men's and women's apparel, accessories,shoes and cosmetics for comparable prices to that found in North American stores. The children's line will not be available in Korea until later this year.

Mimran, co-founder of Club Monaco before developing the Joe Fresh brand, said the company sees Korea as a test market for the rest of Asia, particularly high-density countries like China and Japan.

The retailer has not finalized plans for other international expansions, but is in talks with distributors in a number of countries.

Most of the overseas stores will be in stand-alone properties, ranging from 3,000 to 6,000 square feet, with the remainder to be opened inside department stores.

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Note to readers: This is a corrected story: A previous version incorrectly stated the number of stand-alone and studio stores in Canada; it also said there were no plans for a children's line in Korea